The Taiwan Monthly

Sep. 2019

Corporate Governance

Listed Companies’ Corporate Governance continues to Improve in 2019.

The Taiwan Stock Exchange (TWSE) is pleased to share that after more than six years of promotional and advocacy effort starting from the implementation of the "Corporate Governance Evaluation System" in 2014, quantitative data for this period has shown significant progress.

 

According to statistics on shareholders' meetings, in 2018 all listed companies adopted e-voting. Now more than 80%(753companies) of the TWSE-listed companies have nomination systems for election of directors and supervisors in their Articles of Association. This is a 13% increase compared to 669 companies in 2018 or a dramatic 275% increase compared to 201 in 2014. Following mandatory adoption of e-voting, all TWSE-listed companies adopted poll voting in 2018, an increase of 263% compared to 257 in 2014.

 

The TWSE stated that the quality of shareholders' meetings has been significantly upgraded and the other items promoted by the evaluation system have also achieved remarkable results. In terms of the “Structures and Operations of the Board of Directors”, since 2017 all TWSE-listed companies have implemented independent directors. 682 companies had established the audit committees by June 2019, which is equivalent to 73% of TWSE-listed companies and representing a 301% increase from 170 in 2014.

 

For “information disclosure”, a total of 87 TWSE-listed companies filed the 2018 financial reports one month earlier than the March 2019 deadline, a growth rate by 295% compared to 22 in 2014. To comply with the “Corporate Governance Roadmap (2018~2020)”, the listed companies with paid-in capital of NT$10 billion or more or foreign shareholding more than 30% shall provide English financial reports, English annual reports and English meeting handbooks. As a result, the number of such companies also increased significantly this year. For example, the companies issuing English financial reports have grown from 144 in 2018 to 380. The companies providing the notices of meeting in English have grown from 451 to 538. The companies releasing the meeting handbooks in English have grown from 267 to 397. The companies providing the annual reports of AGM in English have grown from 196 to 358. Information transparency has clearly improved.

 

In terms of the “non-financial information disclosure”, a total of 252 TWSE-listed companies have filed their CSR reports to the M.O.P.S as of July 30, 2019. Among them, 212 were mandated by the regulations and 40 were voluntary. Pursuant to the rule there are also 57 TWSE-listed companies that can postpone their CSR report issuance deadlines until September 30, 2019. Compared to the 352 CSR reports filed in 2018, at least 360 listed companies are anticipated to submit their CSR reports by the end of 2019.

 

In order to enable TWSE/TPEx-listed companies to keep up with trends and connect with the world, the Financial Supervisory Commission (FSC) launched the 3-year “Corporate Governance Roadmap (2018~2020)” in April 2018. In order to regulate the functions of boards of directors and be in line with the roadmap, TWSE amended the “Taiwan Stock Exchange Corporation Operation Directions for Compliance with the Establishment of Board of Directors by TWSE-listed Companies and the Board's Exercise of Powers” on December 27, 2018. New measures include “a majority of the remuneration committee members shall be independent directors”, “establishment of the standard operational protocol for responding to requests from directors” and “take out directors and supervisors liability insurance”, it is mandatory for all TWSE-listed companies to comply by June 2019. Under specific conditions, TWSE-listed companies shall appoint one chief corporate governance officer. In addition, companies shall regularly evaluate the performance of the board of directors and conduct self-evaluation or peer review by 2020. Measures in the roadmap promote the development of TWSE/TPEx-listed companies’ corporate governance in Taiwan. Corporate governance-related statistics can be found on the Corporate Governance Center’s Statistics website (http://cgc.twse.com.tw/). 

 

For further inquiries, please contact Ms. Cheng at 1209@twse.com.tw .


Items / Number of companies

2019*

Growth%

6-Year

Growth%

2018

2017

2016

2015

2014

Protecting Shareholder

Rights and Interests / Treating

Shareholders Equitably

Adoption of a nomination system for directors and supervisors in their Articles of Association

753

12.56%

275%

669

583

424

322

201

Adoption of e-voting

(comprehensively in 2018)

932

0.43%

391%

928

728

475

256

190

Held the AGM before the end of May

114

-0.87%

165%

115

91

88

62

43

Adoption of poll voting at the AGM

932

0.43%

263%

928

787

627

393

257

Disclose the numbers of votes cast "For" and "Against" as well as the number of "Abstentions" on each motion reported on MOPS on the same day of the AGM

880

-0.79%

911%

887

735

578

354

87

The average filing date of the Annual Report prior to the day of the AGM (avg. date)

17.78

-0.56%

24%

17.88

18.21

18.15

16.13

14.38

The average filing date of the Meeting Handbook prior to the day of the AGM (avg. date)

31.12

1.11%

21%

30.78

30.88

30.37

28.66

25.70

Enhancing Board Composition and Operation

Set up an Audit Committee

682

16.38%

301%

586

474

327

243

170

Set up independent directors

(Comprehensively in 2017)

932

0.43%

91%

928

907

787

638

488

Information disclosure

Listed companies reporting their audited annual financial results within two months of the end of the accounting period

87

6.10%

295%

82

81

70

47

22

Filing English Financial Report

380

164%

1362%

144

115

93

35

26

Filing English AGM Notices

538

19.29%

637%

451

387

264

133

73

Filing English Annual Report

358

82.65%

348%

196

177

144

107

80

Filing English Meeting Handbook at the AGM

397

48.69%

396%

267

232

183

131

80

Non-Financial Disclosure

Filing CSR Reports -7/30**

252

-

46%

352

342

275

267

171

*: Statistics available until June 2019

**: 360 TWSE-listed companies are anticipated to submit their CSR reports by the end of 2019.